Xcel says Colorado Community Choice Energy won’t advance clean energy goals
A bill recently introduced in the Colorado legislature would direct the state’s Public Utilities Commission to study the feasibility of community choice energy (CCE), also known as community choice aggregation (CCA).
The legislation, HB21-1269, was introduced earlier this month by Colorado State Rep. Edie Hooton (D-Boulder).
Under CCE, communities in Colorado that are served by an investor-owned utility would be allowed to purchase electricity from alternative suppliers, such as solar and wind farms. The investor-owned utility would still own and operate its transmission and distribution system, provide metering and billing services, manage customer service, and implement demand-side management programs, according to a summary of the bill.
“The bill declares that CCE has the potential to enable communities to meet their renewable energy goals and to reduce their electricity rates by allowing wholesale competition and local control over the energy supplier and energy mix without changing the local utility’s current status as sole supplier of electric transmission, distribution, billing, and customer service functions,” the bill summary states.
Xcel Energy, one of two investor-owned electric companies that service customers in Colorado, is not supportive of the bill and says HB21-1269 creates unnecessary risks in regard to achieving clean energy goals.
“CCA does not help advance our broader clean energy plans; in fact, it can stand in the way of our ability to achieve these clean energy goals,” said Michelle Aguayo, media relations representative with Xcel Energy. “In other states, CCA has resulted in significant shifting of system costs to customers outside of the CCA community, including the most vulnerable, low-income customers. These cost shifts complicate and create political and economic challenges to our clean energy vision.”
Xcel is currently working through implementing an approach that would allow the utility to work with communities, Aguayo said, “to help achieve their specific clean energy goals through partnerships. Our approach will provide interested communities with flexibility under current law and will do so without shifting costs to customers in other communities who choose a different path.”
Rep. Hooton said the bill is focused on the California ‘wholesale, opt-out model,’ and noted that several other states are also looking at CCEs.
“The main reason I am running this bill is to investigate a possible path forward for the many communities in Colorado that want to move more quickly to higher levels of renewable energy than either the utility’s 100 percent by 2050 goal or the governor’s 100 percent by 2040 goal,” she said. “Communities that are served by an investor-owned utility currently have no control and little influence over the energy mix used to produce their electricity, so they cannot reach their energy goals.”
HB21-1269 calls for the Colorado Public Utilities Commission to adopt an investigatory proceeding that would involve hearing testimony from utilities, ratepayers, municipalities, and other stakeholders, as well as officials from other states where CCEs have already been implemented. The goal is to give the PUC a better understanding of CCE in the event the energy policy is ever adopted. The commission would be directed to file a report after its investigation to the legislative committee by Dec. 15, 2022.
The city of Boulder, Colo., had recently considered a similar system for the city’s electricity. However, in November 2020 the city voted to renew its franchise agreement with Xcel Energy for 20 more years, instead of pursuing electric utility municipalization. The new partnership will help the city achieve its 100 percent renewable electricity goal by 2030.
Xcel Energy is currently working toward implementing an ambitious renewable energy plan, which was announced on Feb. 24. Among a number of provisions in the plan, the company aims to add about 5,500 megawatts of new wind, solar generation and battery storage. It also plans to significantly reduce coal plant operations by 2030 and retire or repower all remaining coal units by 2040.
“Xcel Energy is focused on successfully implementing our Clean Energy Plan, a proposal to deliver an estimated 85 percent reduction in carbon dioxide emissions by 2030,” said Aguayo. “The plan will result in greater reductions than required by Colorado law and will provide customers with electricity derived from approximately 80 percent renewable sources while maintaining affordable and reliable energy service.”
HB21-1269 will next be considered by the House Committee on Energy and Environment on April 29. Rep. Hooton has said that if the legislation is enacted and the conclusions of the CCE study look promising, that she would likely introduce CCE-enabling legislation in 2023.
